Tag: financial crisis

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OPINION: My thoughts on Birmingham’s budget – Gravelly Hill Councillor Mick Brown

Words by Cllr Mick Brown (Gravelly Hill Ward, Labour & Co-operative) / Pics from Birmingham Labour and Erdington Local archives

As the Councillor for Gravelly Hill, I wanted to give my thoughts on Birmingham’s budget, the difficult decisions that had to be made and the impact the council cuts are likely to have.

As Councillors we have been left will no alternative other than to get the council back on a sound financial footing, but like many of my council colleagues it was with a very heavy heart that I voted for this budget. 

When I talk to Gravelly Hill residents about their concerns over what has happened in Birmingham, there are the four commonly asked questions:

What’s gone wrong here?
I believe that the Council needs to take responsibility for its part in the failings, which include both the ongoing equal pay liability and the botched implementation of the Oracle computer system.  For this reason, I’m backing the call for an independent inquiry so that the people of Birmingham can see that there is accountability for what’s gone wrong here.

The failure to deliver savings in previous years, is a further reason for the need to save £300 million over the next two years. However, much of the savings we have had to find are due to increased costs, and more people needing our services due to the cost-of-living crisis.

Is this just happening here?
While some of this situation is unique to Birmingham, the constant underfunding of local government is an issue for councils up and down the country regardless of political persuasion.  Birmingham has lost over a billion pounds over the last decade, as we are all being hit by inflation and rapidly increased demand for services such as adult social care and childcare services.

What’s been protected?
We will still have millions to spend on services, for example the Council has safeguarded the future of the Wellbeing Leisure Centres, and the aim is to ensure a £1 million fund for youth services across the city. While the cuts are far larger than we would have wanted to have made, with the adult care being cut by 6% and children and young people services cut by 14%; the rising demand for both services means that the amount of money spend is rising despite the budget cuts.

What’s happening next?
We know that the way the council works needs to change, and we need to get better at working with partners across the city. We are going to consult with the people of Birmingham on how you want services to be delivered in your local area, so that we give people the support that they need in the most effective way possible.

As councillors we all have a role to play going forward standing up for our communities and ensuring that the transformation of the Council delivers the better basic services that the residents of Birmingham deserve.

Click here for more from Gravelly Hill Councillor Mick Brown (Labour & Co-operative).

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NEWS: “A bad taste in the mouth” as Birmingham City Council employees facing cuts to local services presented with “crazy” voluntary redundancy packages

Words by Jacob Morgan

Birmingham City Council has presented workers with a “crazy” new voluntary redundancy package, whilst it grapples with massive cuts – as part of a recently approved budget that will see the largest local authority in Britain withdraw £300m from public services.

Birmingham City Council (BCC) employees were offered voluntary redundancies last August, under its Mutually Agreed Resignation Scheme (MARS).

However, after many calculated their MARS settlements and agonised over the decision whether to leave or stay from their jobs, the Council withdrew the offer in a last minute U-turn – as Erdington Local reported last November.

But Erdington Local can now reveal, BCC employed workers were recently sent an email about forthcoming redundancies with a “lower settlement” – which the Council acknowledged could run into 600 jobs being lost.

A Council spokesman confirmed: “We anticipate that (subject to consultation) up to 600 posts may be declared redundant across the council.”

Workers in children’s services, the youth service, SEND provision, the careers service, and other departments earmarked for budget cuts, have begun to receive voluntary redundancy offers that are seen as “lower” than last year’s MARS scheme.

A Birmingham City Council spokesperson further confirmed the new round of voluntary redundancies.

They told: “A targeted voluntary redundancy scheme has been opened to employees working within services that are seeing proposals for workforce reductions or changes, as a result of the budget savings that the council is having to make. 

“The voluntary redundancy scheme and proposed payment arrangements are enhanced from the statutory minimum for voluntary redundancy payments.”

A Council employee, who has more than 15 years service, told Erdington Local they have received another voluntary redundancy offer which has left “a bad taste in the mouth”.

He added: “I just do not trust the Council anymore. Last year I spent weeks really thinking hard whether I want to be part of what is going to be left after all these cuts.

“I love my job, I work with some amazing but vulnerable youngsters, and can see the difference I make. But where I work could close… so what is the point of staying?

“Also, I spent ages looking at the settlement I was offered under MARS and what that could mean for my immediate future.

He added: “However, just as I was about to submit my voluntary redundancy submission they scrapped MARS. I really, really, really resent the amount of time I wasted thinking it about. They are playing with people’s lives – I that’s what so annoying.

“And now, just a few months later, I have got another voluntary redundancy offer, with a lower settlement.

“I am getting out of this organisation, which is run by people who do not care about the work their employees do.”

Unite regional officer for Birmingham Council, Lee Wiggetts-Clinton, said: “This is a tremendously uncertain time for all staff at Birmingham (City) Council, one thing they can guarantee is that Unite will always have the backs of its members.

“It is crazy at the moment. I did not like MARS. And I don’t like these lower settlements offered. Obviously, defending on people’s circumstances, a voluntary offer could work.

“But I am telling members, tell them to shove their voluntary offers where the sun don’t shine – wait for the bounty of compulsory.”

The voluntary redundancy controversy comes after the HR expert brought into deal with the personnel problems at Birmingham City Council was himself not kept in post, arguably with questions still left to answer about the more widespread financial issues facing the city.

Interim Director of Human Resources and Organisation Development, Darren Hockaday, was reportedly costing taxpayers between £1,200 and £1,500 a day – which is the equivalent of at least £350,000 a year and a much higher annual salary than that of the Birmingham City Council Chief Executive, who earned around £260,000 per year.

Mr Hockaday leftt Birmingham City Council November 2023 after his contact was not renewed – despite the financial crisis gripping the city, and his role as a key city officer responsible for HR of over around 12,000 Council employees.

Reports from other local media have also cited a Council initiated investigations from solicitors Browne Jackson into allegations that individuals at Birmingham City Council “might have failed to abide by ‘the Nolan principles’ that govern public life, including acting with integrity and honesty.”

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NEWS: “Throw good money after bad” – concerns raised over the real cost to fix Birmingham’s Oracle IT system

Words by Ed King

(The following article is part of an ongoing investigation with Birmingham Dispatch, looking into Birmingham financial crisis and governance issues. For more on The Dispatch, and to subscribe to their daily content, visit www.birminghamdispatch.co.uk )

Birmingham City Council remains shocking unclear as to just how much money – and time – it will take to fix their beleaguered IT system, as the reality of the Oracle scandal starts to come to light.

In a fraught audit committee meeting on Wednesday 21 February, the projected costs outlined to aid with the “reimplementation” of the financail management programme came under fierce scrutiny, with Cllr Meirion Jenkins (Con, Sutton Mere Green) asking “a straight forward question” about how many more paid consultancy days were needed until the problems was solved.

Cllr Meirion underpinned his concerns by reminding the committee “these people are coming in at £1000 per day… possibly more”, mirroring more widespread concerns over the City’s arguably exuberant expenditure on outside consultants.

He further compared the local authority debacle to the private sector, where, he argued, commercial companies would decide “we don’t want to throw good money after bad.”

In response, the City’s Interim Finance Director and Section 151 Officer, Fiona Greenway, admitted the Oracle recovery team “are getting to grips” with the situation and pulled back on providing “a set of numbers and deadlines… only to come back and say, actually they’ve changed.”

Greenway, the Council officer who issued the Section 114 Notice in September 2023 – effectively declaring Birmingham as bankrupt, has recently been appointed as the Council’s Senior Oracle Responsible Officer working underneath Oracle Programme Lead, Philip Macpherson.

Macpherson, who sat on a table alone with slumped shoulders throughout the 21 February Audit Committee meeting, further confirmed his team still has “a lot of work to do” and whilst “estimates” have been put into the Council’s budget to pay for the Oracle fiasco they may have to “refine those”.

Having already reportedly cost Birmingham City Council and its taxpayers £86m, in recent budget proposals for 2024/25 and 2025/26 a further £45m was allocated across the two years to help support the Oracle recovery.

But those projected costs now appear to be more wishful thinking than a concrete cashflow forecast, as an “options analysis” is still being done to decide the best way forward with Oracle.

Greenway further stated the need for an interim financial management system to avoid “a number of risks from manual workaround” as one of the “fundamental issues”, but did not clarify the cost for putting a new system in place “through due procurement process.”

Perhaps the only point that can be agreed upon is the importance of having a functioning system in place, as no financial recovery plan is fully possible without auditable accounts. The Commissioners appointed by Central Government to clean up Birmingham’s financial mess, led by Max Caller CBE, have cited the “Oracle recovery” as one of the “fundamental elements” of their plan to save the city.

But in the same statement, made ahead of the Audit Committee last week (21 February), Commissioners also call out Birmingham City Council for not having “demonstrated the ability and capability” to follow the advice to do so.

After bringing in external auditors Grant Thornton, recommendations over Oracle made to Birmingham City Council on 31 January 2024 again highlighted “a lack of Oracle knowledge” leaving the local authority “without the capability and expertise” to properly balance their books.

But the viability of the entire system is now seemingly under question, which since it’s initial ‘go live’ date nearly two years ago has never operated successfully – leaving the UK’s largest local government to manually “adjust inaccuracies” in its ledger.

Questioning whether the City had now in fact reached “the point of no return” with Oracle, Councillor Paul Tilsley CBE (Lib Dem, Sheldon) went on to challenge previous decisions not to pull the plug on the defunct system as it could have been “cheaper for (the Council) to start again”.

Cllr Robert Alden (Con, Erdington) also questioned the strength of any previous analysis, which was reportedly conducted after the first failings in the Oracle system were addressed, asking that “when the new options appraisal is shared, we can make sure the old one is shared too.”

However, Mark Stocks, Grant Thornton’s Head of Public Sector/Not for Profit Audit and author of their recommendations made to Birmingham City Council on 31 January, explained the Council were still “a way away from making that decision” – leaving the future of the Oracle system, and the costs involved in fixing or replacing it, hanging in the balance.

Erdington Local has asked Birmingham City Council for a breakdown to the costs for the Oracle recovery to date, and to clearly identify how much of the projected budget would be allocated to outside consultants or technical support.

It is expected the ongoing financial and logistical concerns over the Oracle system will be addressed at the Cabinet meeting held today, on Tuesday 27 February.

If you would like to get in touch about any of the issues raised in this article, or around Birmingham City Council’s ongoing financial crisis, please email: [email protected]

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NEWS: Pype Hayes resident launches petition to ‘Stop Birmingham City Council’s Unfair Council Tax Increase’

Words by Ed King

Pype Hayes resident, Daniel Edge, has started an online petition to ‘Stop Birmingham City Council’s Unfair Council Tax Increase’ – amassing hundreds of signatures a day from people across the city.

Launched on 10 January, the petition set a target of 1500 signatures which it is well on course to reach.

At the time of writing, only five days after the petition went live on the recognised campaigning website Change.org, 1358 people had put their name down in support – with 228 recorded in a single day.

To access the petition to ‘Stop Birmingham City Council’s Unfair Council Tax Increase’ on Change.org, click here.

Birmingham City Council (BCC) has recently come under question after they wrote to the government last year, to get Westminster to allow the beleaguered local authority to increase Council Tax above the legal limit of 4.99% without holding a referendum.

Current laws limit the amount a local council can increase their yearly Council Tax charge to residents without a public vote on the matter.

But following BCC’s financial crisis, after the city issued a Section 114 notice in September 2023 – effectively declaring itself bankrupt – the drastic step has been taken to get government approval to jump those restrictions, meaning Birmingham residents could face an increase of up to 21% on their Council Tax bills over the next two years.

The decision to approach central government to allow such a significant hike in Council Tax, without the legally required public consultation or vote, was approved by BCC in a full Cabinet meeting in December 2023 – with Council Leader John Cotton stating it would only be implemented “if necessary”.

Cllr Cotton added: “It’s clear that we’ll need to seek exceptional financial support from the government in order to bring the council’s budget back into balance.

“These are obviously very tough times, we’ve got some difficult and challenging decision ahead of us in shaping this budget.”

On 5 September 2023, Birmingham City Council issued a Section 114 notice after facing a budget shortfall of around £84m for their next accounting year.  

There were also reported debts over equal pay liabilities amounting to an estimated £760m and costs surrounding the Oracle IT system of up to a further £100m – although these figures have been questioned by some sources in the city.

With a team of commissioners now overseeing Birmingham’s bank balance, local residents are worried they will end up footing the bill for BCC’s mistakes – seeing “unfair” increases in Council Tax and losing services.

Speaking to Erdington Local about his decision to start a petition to ‘Stop Birmingham City Council’s Unfair Council Tax Increase’, Daniel Edge explained: “I was moved to create the petition because of the unfairness and injustice of the proposed council tax hikes.

“Birmingham has 1.1M citizens of various socio-economic groups and a large proportion of those will be significantly impacted by these above inflation increases.

“It is simply not fair that the council tax payers are picking up the pieces of over 10 years of financial mismanagement. I’m happy for a 4.99% increase, the most the council can do without seeking government approval, but not a penny more.”

One signee of the petition comments: “I’m a resident of Birmingham and the councillors should be held to account for their mismanagement of finances over the years as opposed to this ridiculous increase in council tax.”

Another adds: “Daylight robbery! Stealing from the poor full stop for mis-management of public funds.”

Whist a further supporter of the petition ends their comment by saying: ”… I am being penalised for being a good resident and paying my way. I am not prepared to be a cash cow.”

To read more on the petition to ‘Stop Birmingham City Council’s Unfair Council Tax Increase’ visit: www.change.org/p/stop-birmingham-city-council-s-unfair-council-tax-increase